In just the first quarter of last year, 331,000 new businesses were formed in the United States, and on average, 137,000 startups are emerging globally every day. In this age of startups and constantly growing companies, the challenge of increasing sales can indeed be a very difficult task. This is where Fractional Sales Management (FSM) comes into play.
It’s an innovative approach that has revolutionized how small businesses and startups maximize their sales potential. Fractional sales management is a practical and cost-effective solution for companies that cannot afford to hire experienced full-time sales executives, offering a less expensive strategic alternative.
The split work model has certainly evolved considerably over the years. The advent of the internet and digital communication tools has been fundamental in simplifying remote working and collaboration between multiple organizations.
Economic factors, particularly the global pandemic, have pushed businesses towards more flexible and cost-effective staffing solutions. Simultaneously, a cultural shift in workforce preferences towards greater flexibility and work-life balance has fueled the expansion of the gig economy and contract-based roles.
Sales veterans, who recognized the unique challenges faced by small businesses, introduced the concept of Fractional Sales Management. Traditionally, these companies, after reaching a ceiling with their sales levels, struggle to access the next phase of growth because the strategies and efforts that have brought them to a certain point are not enough.
Hiring an experienced sales manager might seem like an obvious solution, but finding this talent and making the right offer presents significant obstacles. Fractional sales management has become a solution that offers help in managing sales in a part-time, professional way.
If you’re unfamiliar with it, the concept is straightforward. Fractional sales management means hiring a part-time sales manager who helps improve and speed up the sales and growth of a business. This approach is very useful for companies that are just starting to expand and have a limited budget, making it difficult to hire a truly experienced head of sales full-time. A part-time sales leader brings a wealth of skills and strategic vision, creating and executing strategies and sales plans customized to the specific needs of the company.
Fractional sales management’s part-time sales managers work flexible hours, which can range from a few days a week to a few days a month, depending on what the what a chief brand officer does. This flexibility allows companies to have access to high-level sales expertise without having to pay a full-time salary. They are responsible for improving the sales process, managing the sales cycle, and solving problems related to sales personnel.
For startups and small businesses, the cost benefits are very clear. Fractional sales management offers the guidance of a full-time VP of Sales but at a much lower cost. This model is versatile and adapts well to different stages of company growth and sales team sizes.
Fractional sales management isn’t just about saving money; it’s also a strategic way to help the companies’ growth. It helps manage the difficulties they face in trying to increase sales, without putting too much pressure on their resources. Whether you’re starting with a new sales strategy or have a growing business that wants to improve its sales process, fractional sales management provides a tailor-made, flexible, and cost-effective solution, aiding in sustainable sales growth and business expansion.
See Also: The Truth About Fractional Sales Leadership No One Will Tell You
The Role and Impact of a Fractional VP of Sales
If you own a business or have ever worked in one, you’re likely aware of the crucial role played by the Vice President (VP) of Sales. Typically, a vice president of sales has several responsibilities:
- Work with marketing to design printed and online promotional materials.
- Identify improvements and develop sales plans and strategies.
- Hire and train sales staff.
- Maintain sales operations and manage sales teams.
- Define and manage sales budgets.
- Set quarterly and annual sales goals and motivate sales teams to achieve them.
- Monitor the market and competitor product activities and provide detailed sales forecasts.
- Review customer activity, anticipate their needs, and improve customer satisfaction.
For startups and small businesses, hiring a full-time VP of Sales can be too expensive. Here, the concept of a fractional VP of Sales emerges, providing high-level expertise on a part-time or project basis. This model provides significant impacts, especially for developing businesses, positively influencing both sales operations and long-term growth.
The fractional sales management model brings not only strategic skills but also tangible improvements to companies. Experience plays a pivotal role in crafting sales strategies that are effective and highly adaptable to ongoing market fluctuations. By targeting the most profitable customers and products, fractional professionals can ensure that sales efforts are not only aligned with the company’s broader goals but also result in a significant increase in the team’s competitive advantage.
Their impact is often most noticeable in startups and small businesses dealing with rapidly changing market conditions they are not ready for yet. Unlike a full-time executive, a fractional VP’s leadership is precisely tailored to meet a company’s evolving needs. This adaptability has been proven to accelerate business growth, as companies can quickly adapt in response to market trends under their guidance without wasting months searching for the right approach.
A fractional VP also brings a new perspective that can challenge possible ingrained prejudices within the company, whether about new technologies or different working techniques, promoting a culture of innovation. Their endorsement of data-driven decision-making, supported by intuition, metrics, and analytics, has proven to enhance the discipline and focus of sales operations. This structured approach often leads to a leaner, more efficient, and ultimately successful sales department.
Their extensive networks and relationships open up new avenues for market traction, which is especially beneficial for companies looking to expand or enter new markets. These connections provide invaluable resources and opportunities that might otherwise be inaccessible.
The risk reduction inherent in this working model should not be underestimated. By committing to a fractional VP for specific, time-bound goals, companies can safeguard themselves from long-term financial commitments, an advantage that has proven crucial for companies in uncertain economic climates.
A fractional VP of sales is much more than a strategic asset; they can act as catalysts for tangible and positive changes within companies. Their ability to drive innovation, improve scalability and flexibility, and mitigate market risks has a profound and lasting impact. This leads to a dynamic, efficient, and successful sales team, well-equipped to thrive in a changing market even after the collaboration with the VP ends.
Optimizing Sales Performance With a Fractional Sales Manager
Optimizing sales performance remains a key objective for companies, particularly true for those facing complex, prolonged sales cycles and intricate customer acquisition processes. Fractional sales management offers a tailor-made solution aligned with the specific needs of these companies.
In the long run, there are several advantages to hiring a fractional sales manager. Let’s explore them together:
- Increased Sales Productivity: Fractional sales managers are adept at quickly improving the efficiency of sales teams. Their experience across different teams and environments enables them to coach and lead effectively, fostering the skills needed to close deals, manage territories, and build strong customer relationships.
- Improved Sales Process: Implementing best practices and methodologies learned over time and across markets, fractional sales managers streamline sales processes, identify and correct bottlenecks, and guide reps away from common pitfalls that hinder sales success.
- Advanced Sales Metrics and Analytics: Setting and tracking relevant sales goals, analyzing data, and providing continuous feedback, fractional sales managers equip companies with the information needed for informed decision-making and sales strategy optimization.
- Effective Sales Management Practices: Beyond driving sales strategies, fractional managers refine overall sales management. This includes polishing sales policies, managing administrative tasks, and overseeing sales territory assignments and quotas.
- Cost Reduction: Opting for a fractional sales manager significantly reduces the costs associated with a full-time position, including salaries and benefits, often delivering faster results and better ROI. Additionally, a fractional sales manager salary typically excludes bonuses, FICA taxes, and other corporate expenses, further reducing costs.
- Unmatched Flexibility: One of the biggest advantages of this model is its flexibility. Companies can engage a fractional VP of Sales tailored to their unique requirements, such as sales strategy refinement or market expansion, expanding their sales resources efficiently without the financial burden of a full-time hire.
- Experienced Leadership: Bringing a wealth of diverse experience from various industries and sales environments, fractional sales managers quickly identify and resolve sales challenges, consistently guiding sales teams toward achieving their goals. In addition to bringing a depth of knowledge, these managers also play a critical role in evaluating sales teams and leaders based on results.
Every sales team and leader should be evaluated based on results, and a part-time head of sales can assist in defining relevant KPIs for your business, sales team, and themselves. The role of a fractional sales executive encompasses more than achieving set objectives, often involving tasks like one-on-one meetings, recruiting, and sales coaching, similar to the responsibilities of a full-time manager.
The best sales leaders are empowered to make personnel decisions, including hiring and firing, akin to a full-time VP of Sales. However, they often prioritize retention over replacement due to the costs and efforts involved in recruiting and training new sales personnel
How Do You Hire Fractional Sales Management Staff?
Before embarking on the search for a fractional VP of Sales, it’s imperative to first identify your sales process needs. This involves analyzing the current process, pinpointing areas for improvement, and establishing exit criteria for each step.
Evaluating potential candidates is a crucial step. This involves an initial screening, human resource screening, pre-employment tests, and face-to-face interviews with the manager.
Establishing clear expectations and deliverables for the fractional VP of Sales is also crucial for ensuring a successful partnership. This includes defining expectations, linking them to organizational goals, and communicating them clearly and regularly to avoid misunderstandings.
The ideal candidate should possess a thorough knowledge of the industry and be able to quickly adapt to the company’s sales environment. During the hiring process, it is important to explore their past experiences, strategies implemented, and results obtained, understanding their approach to sales management.
Here are the key steps in the hiring process:
- First, define the criteria for selection, such as requiring 10+ years of sales leadership experience
- Evaluate candidates’ qualifications and expertise
- Clearly define the role’s scope and qualifications
- Maintain effective collaboration with the fractional sales management staff member
It’s best to work with someone you think can be a long-term solution or help you grow until you need a full-time sales manager. If you have more questions or wish to discuss further, the team at how Koehn Painting grew call volume 400% is here to help and address any doubts you may have! For the wider picture, see our guide to the nine fractional CMO firms we reviewed. To see how we handle this for clients, read about how we work as your fractional CMO.
